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Elizabeth Prentice
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 170
Experience:  Managing Attorney for one of the largest consumer bankruptcy firms in America.
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Hi My business partner wants to file bankruptcy this month,

Resolved Question:

Hi

My business partner wants to file bankruptcy this month, but I do not.

I just signed a deed transfer on Tuesday for my home to my ex-wife due to a divorce settlement. The divorce settlement was finalized in late July.

Will our bankruptcy filing interfere with the deed transfer?

Can the bankruptcy court stop the deed transfer, or reverse it?

Should my partner & I wait until the deed transfer is completed, which takes about 1-2 months in NYC?
Submitted: 11 months ago.
Category: Bankruptcy Law
Expert:  Elizabeth Prentice replied 11 months ago.
I am a bankruptcy attorney and I would be happy to assist you. Filing bankruptcy will affect the deed transfer. So it would be advisable to make sure it was fully transferred before you file. Once you file bankruptcy, the trustee can not object to the transfer since it was court ordered. Make sure to provide the trustee a copy of the order once you file bankruptcy.

I hope my answer has assisted you and you will provide me a positive rating!
Customer: replied 11 months ago.

Hi...


 


Thanks for the answer.


 


What can the courts do to the transfer while the transfer is taking place?


 


In the extreme case, if the transfer cannot take place in time, can I ex-wife sue for the houses, since it was given to her in a court order.


Expert:  Elizabeth Prentice replied 11 months ago.
If you file bankruptcy while the transfer is taking place, the bankruptcy "stay" would prevent the transfer from completing. Once you file bankruptcy, the "stay" starts. "Stay" is a legal term which means that all transfers of property are halted. Imagine, if you will, an imaginary legal shield that stops everything --- creditors calling, your ability to obtain credit, property transfers, etc. are all halted. At that point she would have to hire an attorney and file a "motion to lift the stay" in your bankruptcy and prove that she had legal right to lift the stay to proceed with the transfer. At that point the trustee could potentially object to her lifting the stay or delaying the proceedings. I am not saying the trustee has a valid reason to object, but some trustees request that the motions to lift stay be delayed as along as possible until they can assess the estate. Additionally, even if the trustee did not object, the hearing is set for about 30 days after the motion to lift stay is filed. So in the end, it would cost her money and more time to complete the transfer if you file bankruptcy before the transfer is complete.

I hope my answer has assisted you and you will provide me a positive rating!
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 170
Experience: Managing Attorney for one of the largest consumer bankruptcy firms in America.
Elizabeth Prentice and other Bankruptcy Law Specialists are ready to help you
Customer: replied 11 months ago.

My business partner & I are still current on our bills.


 


It is too early for us to file bankruptcy, since we cannot meet the coming mortgages?

Expert:  Elizabeth Prentice replied 11 months ago.
No, it is not. You do not have to be delinquent to file bankruptcy, at all. BUT there is something called a "preference" rule. This means that you preferred paying 1 creditor over another in the 90 days before filing bankruptcy. So the general rule bankruptcy attorneys advise to their clients, is to NOT pay any unsecured debts in the 90 days prior to filing bankruptcy which will total over $600, otherwise the trustee goes back to the creditor and takes it back, but he will not give it back to you. For ex) if you have a credit card at Costco for your business and you make $200 monthly payments in the 3 months before filing bankruptcy, the trustee gets to go back and take the money back from Costco. They then divide it among all the creditors and give each one a few dollars, after taking their 10% cut.
So it would be a waste to pay the creditor. A mortgage or other loan that is secured should be the bills you focus on paying. These are secured loans and will not apply to this preference rule, since they have some security (the asset).
Customer: replied 11 months ago.

Regarding the transfer to my Ex-Wife, I went to a title company and signed over the property to her.


 


Is it correct that the day that it gets recorded with the county, is the day that the property belongs to my ex-wife.


 


Or does she have to wait until she gets the deed back in the mail with her name in it?


 


 

Expert:  Elizabeth Prentice replied 11 months ago.
You are correct. Once it is recorded with the county, it is officially hers. The mailing time for her to get the deed back does not matter. Thank you for the excellent rating! Please feel free to ask for me specifically by name in the future if you have other questions. I would be happy to help you!
Customer: replied 11 months ago.

Can the bankruptcy "Stay" change the recording once the transfer is recorded with the county?

Expert:  Elizabeth Prentice replied 11 months ago.
No it can not. The bankruptcy stay would only prevent asset transfers before they were recorded. If you have any other questions, please feel free to remember to ask for me in the future!
Customer: replied 11 months ago.

Last questions...


 


My can accept personal bankruptcy for myself.


 


I am concerned that my bankruptcy filing will effect my Ex-wife & child's housing.


 


After the transfer is completed, can the trustee challenge my divorce and reverse the property transfers.


 


I owe 6 properties and in the settlement, I gave her four.


In return, I do not pay any living support for her, but do pay for my child.


I kept my two cars and three businesses, and retirement account.

Expert:  Elizabeth Prentice replied 11 months ago.

the trustee can only challenge the divorce court orders if the trustee believes that the property transfers were done in bad faith. They are looking to see if you transferred the properties to her illegally or to avoid the trustee from taking them in preparation for bankruptcy. That does not appear to be the case here. It sounds like you gave her proper settlement in the divorce and therefore she has a legal claim to keep the property. Also, the court order from the family court judge will support her position that the properties are neither yours nor the bankruptcy trustee's property. NY permits an equitable distribution of assets. It does not require a 50/50 split. So if the divorce court judge thought it was equitable, the trustee will have a difficult time claiming that it was not. Make sure to retain a qualified bankruptcy attorney when you file who fully understands bankruptcy law. I hope my answer has assisted you and you will provide me a positive rating!

Customer: replied 10 months ago.

Hello,


 


Just one more question referring to the case mentioned above.


 


I am just concerned about the house that she lives in now with my child.


The other properties do not really matter.


 


Somehow, if the trustee reversed the transfer, can they force my ex-wife to sell the house, so they can take the 1/2 that I own.


 


What are my options?


 


Before, the divorce, New York house, which is her main house, was a 50/50 ownership.



The bankruptcy filing will be in Pennsylvania.


 


I am just concerned since my bankruptcy filing is only 1-2 months from the property transfer.


 


Also, we had a quick divorce with no lawyers involved.


We just paid someone to do the court filing for us.


We just wrote down what we would accept on the settlement.


I mainly wanted my business, which I had for almost 14 years.


 


 


It looks so bad on paper.


 


My website business dropped alot due to the Google algorithm upgrade during the middle of the year.


 


Regarding the divorce settlement, in terms of equity on the properties, I got more then her based on the purchase price less the debt of the 7 properties.


 


But, I did get more debt also due to the mortgages.

Expert:  Elizabeth Prentice replied 10 months ago.
If, in a worst case scenario, the trustee claimed that you improperly transferred the home to your wife in order to conduct bankruptcy fraud, he would most likely dismiss your bankruptcy and potentially criminally charge you. The next potential scenario is if the trustee claimed that the estate was merely entitled to half of the home, since he thought the transfer was for unfair value. If he also claimed it was your primary residence (assuming you don't own any other real estate) your attorney could claim the residence that your son is in as a primary residence and attempt to exempt it under the state bankruptcy exemptions. Third scenario - if there was no way to protect the asset or exempt it, the trustee will give you an option of either selling the home and giving him the proceeds or allowing you to keep the home and pay to the trustee the estimated appraisal amount he has determined to be your 50% ownership. I recommend that you retain a bankruptcy attorney in your area to assess both your divorce paperwork and your real estate transactions before proceeding with filing for bankruptcy relief.

I hope my answer has assisted you and that you will leave me a positive rating.
Elizabeth Prentice, Attorney
Category: Bankruptcy Law
Satisfied Customers: 170
Experience: Managing Attorney for one of the largest consumer bankruptcy firms in America.
Elizabeth Prentice and other Bankruptcy Law Specialists are ready to help you
Customer: replied 10 months ago.

wow...reference to your first sentence,


 


If they dismiss my bankruptcy, they will not sell or take anything, and just charge me with a crime?


 


How often does criminally charge someone for bankruptcy fraud happen?

Expert:  Elizabeth Prentice replied 10 months ago.
Federal bankruptcy fraud is quite serious. It does happen, and cases are dismissed. Depending on the severity of the fraud, criminal charges can be pressed. You should not be concerned, as long as the transfers of assets were not done in preparation to hide assets from a bankruptcy trustee or the court. Since your transfers occurred in a divorce, it is unlikely that the trustee will find any of the scenarios mentioned above, as long as the transfers were done properly and per NY law in your divorce. The division of assets in a divorce is quite normal. Many people file for bankruptcy after divorce, so your divorce prior to filing bankruptcy will not send up a red flag to the trustee. However, you should have a local bankruptcy attorney review your paperwork before filing to make sure that the distribution of assets looks equitable and that you have properly answered everything in your bankruptcy paperwork. The trustee is going to be looking for full disclosure. The more you disclose upfront regarding the divorce and asset distribution in your bankruptcy, the less of a chance there is of the trustee overturning the asset distribution.
Customer: replied 10 months ago.

I did speak to 3 local bankruptcy lawyers, 2 in PA, and one in NY, and they said the split was fair.

Expert:  Elizabeth Prentice replied 10 months ago.
Thank you for the added information. Then you should go forward with retaining a bankruptcy attorney and filing for relief under the bankruptcy code. Good luck with your bankruptcy case!

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